Should You Decline the Total Loss Settlement for Your Older Vehicle?
Making Informed Decisions After a Car Accident: What Are Your Options?
If you’ve recently experienced a minor collision with your older vehicle, you might be weighing the pros and cons of accepting an insurance settlement versus keeping your car. Here’s a professional overview to help you navigate this decision.
Case Overview
Imagine owning a 2006 Volkswagen Jetta with over 140,000 miles on the odometer. After a rear-end collision caused by another driver at fault, the damage was primarily limited to the rear bumper cover and taillight. The car remains drivable, although there are minor warning lights such as check engine and airbag indicators.
Insurance Assessment and Settlement Options
The at-fault driver’s insurance company has evaluated the damage and deemed the vehicle a total loss — a decision that aligns with its salvage value estimates, which range approximately from $1,100 to $2,000. Your initial purchase price was around $3,200 four years ago, and the current trade-in value is estimated at roughly $500.
Your insurance coverage on this vehicle is limited to liability only; there is no collision or comprehensive coverage due to high deductibles, making you responsible for repairs if you choose to retain the vehicle.
Possible courses of action include:
- Accept the settlement and let the insurance company take possession.
- Opt to keep the car by forgoing the payout, potentially involving a salvage buy-back process.
Understanding the Implications in Georgia
In Georgia, the process for a salvage vehicle requires repairs followed by inspections and obtaining a rebuilt title. If you choose to decline the insurance payout, you generally retain ownership — but you will be responsible for repairs and the administrative process to re-title the vehicle.
Is Keeping Your Old Car a Viable Option?
Given the situation, some car owners consider rejecting the insurance settlement, especially if they plan to keep the vehicle operational. Since you are comfortable with your current car, and it still runs reliably, maintaining it could save you the hassle and expense of buying new transportation.
However, there are considerations:
- You might need to address minor body repairs out of pocket.
- If you do not accept the settlement, the insurance company will not disburse funds. But you can avoid the salvage title process if you handle repairs independently and ensure the vehicle’s safety.
Financial Planning and Future Outlook
As a professional with upcoming income growth, delaying the purchase of a new vehicle could be advantageous. You may
